PERTH (miningweekly.com) – TSX-listed Macarthur Minerals has entered into a share sale agreement to dispose of its Western Australian iron-ore projects in a deal valued at A$6-million.
The agreement, inked with GIM Australia, was subject to a number of conditions, including GIM’s acquisition of another project owned by an unrelated third party, the satisfactory conclusion of due diligence, Foreign Investment Review Board and TSX-Venture Exchange approval and Macarthur shareholder approval.
Macarthur CEO Joe Phillips on Wednesday said the transaction would reduce the company’s overheads and allow it to focus on bringing the Roper Bar iron-ore project, in the Northern Territory, back into production.
“In the current market, developed mining assets can be acquired for a fraction of the capital invested, while greenfield iron-ore projects are challenging and expensive. Recently, we announced the proposed acquisition of the secured debt facilities over Western Desert Resources’ Roper Bar iron-ore project, in partnership with the Tulshyan Group.
“This is a quality, developed mining asset that was producing and exporting iron-ore and has a great longer-term potential,” he stated.
He noted that Macarthur was planning to return the Roper Bar project to production and was already progressing with contractor negotiations.
Macarthur and the Tulshyan Group in September entered into agreements with Macquarie Bank to acquire Western Desert’s A$78-million outstanding debt. The joint venture (JV) was required to replace some A$6.5-million in environmental bonds for the project and would be responsible for 50% of the project’s care-and-maintenance costs, up to a maximum of A$300 000, until the end of the financial close of the transaction.
At the time of the agreement, Macarthur said the JV would determine the best strategy to recover the secured debt while the Roper Bar project remained under care and maintenance. This could likely include initially restarting low-cost, small-scale project operations, with a longer-term view of returning the project to full operation.
Some A$250-million was spent on bringing the mine into production and opencut operations started in 2013. By June the following year, the project had exported some 765 000 t of iron-ore.
Western Desert was forced into administration in September 2014, as iron-ore prices fell.